Metric Income Plus Limited Partnership (MIPP), a joint venture between LondonMetric Property and the Universities Superannuation Scheme (USS), is to acquire Trostre South Retail Park in Llanelli from Benesco.
The deal price of GBP12.8 million reflects a net initial yield of 6.8 per cent.
The 75,400 sq ft retail park is let to B&Q, Pets at Home and KFC with a vacant unit of 10,000 sq ft, formerly Dreams, which is subject to a two-year rental guarantee. The average rent is GBP12.10 psf and unexpired lease term is 14.7 years.
The park is adjacent to the 450,000 sq ft Trostre Shopping Park anchored by Tesco, M&S, Next, Debenhams and BHS.
LondonMetric previously announced its agreement with USS to extend the joint venture by two years and grow the company’s ownership to 50.0 per cent from 33.3 per cent through further investment.
The acquisition will be funded entirely by LondonMetric from existing resources and upon completion of the transaction LondonMetric’s ownership in MIPP will rise to 42 per cent.
The MIPP portfolio will comprise 19 properties, including Llanelli, with an investment value of GBP173.4 million and a running yield of 6.3 per cent. The average unexpired lease term across the Joint Venture portfolio is 14.4 years with 25 per cent of the rental income benefiting from fixed uplifts. The average passing rent is GBP14.20 psf.
Andrew Jones (pictured), chief executive of LondonMetric, says: “This acquisition is consistent with MIPP’s investment criteria and demonstrates that, despite a competitive transaction environment, the Joint Venture can continue to source attractive deals that will deliver strong income returns and asset management upside.
“Having reached the joint venture’s original investment target in December today’s transaction enables LondonMetric to make progress towards achieving a 50 per cent ownership position. On completion of Llanelli, we will increase our share of MIPP net income by a further GBP1.0 million per annum.”
Edgerley Simpson Howe advised MIPP. Harvey Spack Field/Metrus advised Benesco.